A Nation of Schizophrenic Spenders?
Each day, Inc.'s reporters scour the Web for the most important and interesting news to entrepreneurs. Here's what we found today:
The new abnormal economy. With unemployment still hovering at almost 10 percent, who are all those folks at the mall? How is it possible that Starbucks, the cliche indicator of the splurge economy, is enjoying a 61 percent increase in operating income? How is Apple's net income up 94 percent last quarter? BMW's profits surging? Bloomberg Businessweek attempts to nail this down, by writing about the "nation of schizophrenic consumers. "They splurge on high-end discretionary items and cut back on brand-name toothpaste and shampoo." The chief economist or the International Council of Shopping Centers says "It was all dollar stores and luxury. You have this bifurcated market. This year, it started to move to the middle a little. Now it's kind of moved back to the edges." So, retailers, play it high — or very low. And read more here.
What's in a name? Deciding upon a great name for your start-up is no easy task, but if you ask Jason Cohen, the founder of software company Smart Bear, you shouldn't sweat it too much. Cohen offers some advice in a blog post on the topic of nomenclature and branding. He explains that he picked the name Smart Bear "with utter disregard to marketing or business sensibility," and that a VP of sales persuaded him to change it because "potential customers — IBM, Intuit, Adobe, Qualcomm — aren't going to take us seriously with a silly name like 'Smart Bear.'" Ultimately, though, Cohen stuck to his guns and the name caught on - when he sold the company, the buyers eventually rebranded their entire company to the Smart Bear name. He came away from the experience with a few important lessons about branding, including that "your time isn't well-spent fretting about brand (early on). Still stuck on a name? Check out our guide for some business-naming tips.
Growth on the South African horizon. On the heels of its success as the the first African nation to host the World Cup, South Africa may be the next center for industrial growth, according to The New York Times. The country, which has long been afflicted with HIV/Aids, desperate poverty, and an unemployment rate of 24.5 percent, has given birth to a new and determined generation of clean energy, aviation, engineering, and military contracting entrepreneurs. The country's minister of science and technology, Naledi Pandor, says: "We are a producer and exporter ... Now we're saying: let's become an innovator." According to the Times, the South African government is now "offering direct financing and other sweeteners" to rising businesses. One such company benefiting from this initiative is Optimal Energy, which will release the continent's first battery-operated car by 2013. Though Optimal predicts the majority of sales will come from outside Africa, the production plant will be firmly rooted in the Eastern Cape. "There are lots of good ideas here and a strong history of engineering and design, but we don't commercialize and build sustainable business — we sell them to others," says Optimal's sales and marketing director. "Now there's an enormous drive to keep the value in South Africa."
An alternative metric of start-up success. When you read about a start-up, it's often because it has closed a successful round of funding and those figures become feathers in a company's cap. While they might bed markers of early success, they're pretty poor measurements of a start-up's potential. After all what gets VCs fired up about a company is not how much dough it's scrounged together in earlier rounds but it's human capital. A new report, published by CB Insights culls data from 165 early-stage Web start-ups and puts together stats on the race, age, and experience of company founders. It's an interesting read but it isn't likely to become a common metric of start-up success any time soon.
Advice for early-bird entrepreneurs. Writing today in a guest post on the Wall Street Journal's India blog, twenty-something social media entrepreneur and blogger Rajiv Dingra has some tips for other would-be young entrepreneurs. His first piece of advice is actually more of a warning: "Being an entrepreneur isn't easy." That said, Dingra suggests that "early-bird entrepreneurs," while young and inexperienced, have some advantages on their side. For example, young entrepreneurs have a boundless supply of energy, most have at least some financial support from their family, and their inexperience can be a powerful asset. As Dingra explains, "Ignorance, or the ability to try things without planning and analyzing on whether they will work, actually helps you become a discoverer rather than a planner." For a look at some young entrepreneurs who have already made their mark, check out our 30 Under 30 package.
In social-media buzzword overload? Meet WhatTheFuckisMySocialMediaStrategy.com. It's a random-phrase-generating website subtitled "making it up so you don't have to." As TechCrunch writes: "PR agencies and social media experts across the Web, prepare to meet your match." Go to the site, and find a mash-up of catch-phrases, jargon, and the dreaded buzzword. Example: "Utilize social currency to amplify experiences and drive conversations." Or: "Maximise breakthrough by leveraging influencers." Huh? The take-away? Focusing on fancy words is not the way to amplify, foster, facilitate, leverage, harness, enhance, or repurpose anything.
Ask Inc. your questions. This week we launched Ask Inc., a new online community for entrepreneurs looking for answers. With our partner Mahalo, we've created a place for you to get advice from peers and leading experts on topics ranging from small-business sales and finance to hiring and technology. Pop in to ask a question or to exchange ideas with fellow entrepreneurs. To join the Ask Inc. community, go to: www.ask.inc.com.
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CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.